College May Keep Tuition Money Paid by Bankrupt Parents, Judge Rules

A federal bankruptcy judge ruled that Sacred Heart University can keep roughly $65,000 in tuition money in a legal battle that’s grown more common as the cost of college rises and tuition payments become a popular target of bankruptcy trustees. U.S. Bankruptcy Judge Melvin Hoffman ruled that Steven and Lori Palladino benefited from paying their daughter’s tuition at the private Connecticut university. The decision allows the school to avoid returning the money—paid between March 2012 and March 2014—to a court-appointed trustee who sought the money to pay debts as part of the Massachusetts couple’s 2014 bankruptcy.